Drug makers considering ‘substantial’ decreases in prices, Azar says

ASHINGTON — Several drug companies are considering “substantial and material decreases” in the prices for their drugs, Health and Human Services Secretary Alex Azar said at a congressional hearing Tuesday.

“There are actually several drug companies that are looking at substantial and material decreases in drug prices, in competitive classes, and actually competing with each other and looking to do that,” Azar said, declining to name the specific companies or products.

His comments come about two weeks after President Trump pledged that “some of the big drug companies” would be announcing “voluntary massive drops in prices,” in the coming days, announcements he said were related to his administration’s broader campaign to lower drug prices.

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Since then, HHS officials have been meeting with several major pharmaceutical companies to seek such price cuts, lobbyists confirmed to STAT this week, as first reported by The Hill.

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Drug makers have faced intense pressure to lower prices, and Trump came into office pledging to help bring them down. That pressure, however, has not generally yielded change. A recent report from Senate Democrats found that list prices for the 20 drugs most widely prescribed through Medicare Part D in 2015 increased by an average of 12 percent each year between 2012 and 2017.

Last month the drug maker Bayer hiked the list price for two of its cancer drugs by nearly 8 percent.

At the hearing, Sen. Elizabeth Warren (D-Mass.) asked Azar which companies would be lowering prices, for which drugs, and how much money the American people would save.

Azar repeatedly declined to respond directly but said drug companies are “working right now with the pharmacy benefit managers and distributors” because the companies are concerned they could be “discriminated against for lowering their price” — what he called a “perversion of the system.”

He was likely referring to the idea that PBMs might prefer to put higher-priced drugs on formularies because they would bring in more revenue.

In a statement, Pharmaceutical Care Management Association, the PBM trade group, said “the easiest way to lower costs would be for drug companies to lower their prices.”

“Manufacturers have chosen to negotiate price concessions with PBMs using rebates, which are calculated and paid months after a drug has been dispensed,” the group said. “Simply getting rid of rebates and other price concessions would leave patients and payers, including Medicaid and Medicare, at the mercy of drug manufacturer pricing strategies.”